Welcome to this week’s Third Party Thursday! My name is Heather and I’m an in-house Paralegal here at Venminder.
Whether reviewing a new critical vendor contract or negotiating new terms and conditions of an existing one, there are many elements you need to consider. Pricing and discounts are often a big factor, but you should also be looking for specific provisions to ensure compliance with industry regulations and standards. Today we’re going to be talking about five key provisions to look for in your critical vendor contracts. Let’s get started . . .
1. Does your vendor contract contain an adequate and measurable Service Level Agreement (SLA)?
Your vendor contract should include minimum service level requirements along with any remedies for failure to meet such standards. A well defined SLA should clearly identify expectations and obligations between the parties and should target measuring performance against those objectives. Some things to look for in your vendor's SLA?
2. Does your vendor contract have sufficient security and confidentiality provisions that cover Non-Public Personal Information (NPPI) as well as proprietary information?
The contract should clearly identify vendor’s responsibility to maintain policy and procedures to meet the data security objectives of the GLBA and other regulations by addressing safeguards designed to do the following:
3. Does your vendor contract identify any sub-contractors and ensure that these relationships are in accordance with industry guidance? If the answer is yes, it's important that they include the following provisions within your contract:
4. Will your vendor provide appropriate compliance documents on an annual basis?
Contracts should require that vendors provide, at a minimum, the following compliance documents annually:
...Which brings us to the contingency plans...
5. Does your vendor contract provide for a Business Continuity and Disaster Recovery plan in compliance with Appendix J?
Contracts should include provisions covering compliancy with Appendix J:
We have discussed a few major elements to look for within your critical vendor contracts, but these are by no means the only important provisions. We are really focusing on some of the major elements regulators and auditors are most likely to call out when not properly addressed within your contracts.
Again, I’m Heather and thank you for watching! And don’t forget to subscribe to the Third Party Thursday series.